Share prices on Bursa Malaysia ended higher yesterday in
tandem with the positive sentiment in Asian stock markets, as opinion polls in
Greece showed the pro-bailout conservative party held the lead in next month’s
national elections, and was largely viewed as critical to keeping Greece in the
Eurozone. The FBM KLCI closed 3.82 points or 0.25% higher at 1,554.94 after
opening 5.7 points lower at 1,545.42. Gainers led losers by 412 to 276 while
322 counters were unchanged. Turnover decreased to 735.85 million shares, worth
RM897.64 million, from 875.54 million shares, valued at RM1.18 million,
transacted on Friday.
Taking cue from the weak performance of Wall Street last
Friday, the FBM KLCI opened with a down gap of 5.7 points lower at 1,545.42 and
slipped to the intra-day low of 1,544.63 and stabilized, it then rebounded and
moved higher for the rest of the day to hit the intra-day high of 1,556.69
before pulling back to close off high. Chart-wise, the FBM KLCI formed a
bullish engulfing candlestick which showed the bears were initially in
controlled but later the bulls took over and pushed the key index to close near
the high of the day. With such strong price action yesterday, the FBM KLCI is
likely to continue its upward momentum to climb higher today. Immediate
overhead resistance is at 1,556 to 1,566 while the immediate downside support
zone is at 1,544 to 1,540.
MACD continued to climb higher and its histogram was shorter
upward, indicating continued improvement in the key index’s momentum.
Nonetheless, as the MACD is still below the zero-line and the signal-line,
current up move is still being viewed as a technical rebound in a bear trend.
RSI (14) was higher at 44.8 from 42.6 previously, indicating a continued
improvement in the short term relative strength. Stochastic oscillator also
continued to climb higher to 38.5, indicating a continuation in the short term
up cycle and improvement of market strength. Readings from the indicators showed that the
FBM KLCI is gradually gaining its upward momentum. However, the overall picture
is still bearish bias for the time being.
The short term trend of the FBM KLCI has turned up as the
key index is now closing above the 5 and 10-day SMA, and it might continues its
current momentum to challenge the higher resistance level at 1,566, and a close
above the 1,566-point level would see the FBM KLCI moving into the bullish
zone. The medium term trend is still down while the long term trend remained
up, as the key index continued to close above the long term 120-day SMA for the
last three days. As the school holiday starts, the overall market is expected
to remain quiet for the coming two weeks, and this is reflected by the very low
turnover for the last few sessions.
US
market was closed for the Memorial Day holiday yesterday. Today, the FBM KLCI
is likely to trade within a range of 1,535 to 1,569.
This week's expected range: 1517 – 1573
Today’s expected range: 1535 – 1569
Resistance: 1560, 1565, 1569
Support: 1535, 1540, 1547
Stocks to watch: HIBISCS, MUDAJYA, SUNWAY, WCT, MBSB
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